Thanks to a short tweet from the Tesla boss, the Dogecoin shot up today.
The joking crypto currency Dogecoin ( DOGE ) gained almost 25% on December 20th, after Tesla CEO Elon Musk once again drew the community’s attention to the „Meme-Coin“.
At irregular intervals, Musk, who himself was involved in founding PayPal and accordingly has specialist knowledge of digital payment systems, repeatedly speaks about Bitcoin ( BTC ) and the crypto market, to which he usually reacts noticeably.
In July 2020, Musk had proclaimed the “Dogecoin Standard” analogous to the gold standard , which gave the DOGE a jump of 14%
The reason for such a gain after a tweet from Musk is easy to explain. As crypto market researcher Hasu explains , the prices of the crypto market are “driven by attention”. So if a cryptocurrency suddenly gets more attention, and Musk is one of the most colorful personalities in business and social media, then its price will rise significantly in the short term.
In the middle of it all, he suddenly wrote, „I’ll only say one word: Doge“, which in turn triggered a hype on crypto Twitter. The Dogecoin immediately made it into the trends of the social network, especially after the Tesla boss wrote „former CEO of Dogecoin“ on his Twitter résumé.
According to data from CoinMarketCap, the Dogecoin currently has a market capitalization of $ 549 million. Compared to the big crypto currencies Bitcoin, Ether ( ETH ) and some DeFi cryptos, this market value is still relatively small.
The DOGE ranks 44th among the cryptocurrencies, which means that the trading volume and liquidity of the coin are also significantly lower
Because of these conditions, the tweet of a prominent figure like Musk can make it all the easier for the DOGE rate to suddenly skyrocket.
In November, some altcoins had made a similar price jump when the soaring of Bitcoin drew increased attention to the crypto market. In the slipstream of the market leader, XRP was able to climb to 0.90 US dollars.
DOGE as the starting signal for the Altcoins?
Some crypto analysts point out that considerable upswings in the DOGE in the past have always been finger time for a subsequent uptrend in altcoins as a whole. This is how the trader notes „Crypto Capo“:
„Every old season begins with a high for DOGE.“
The probability that the „alternative cryptocurrencies“ (Altcoins) will go up in the near future is high, because the market leader Bitcoin is facing fierce resistance at the 25,000 US dollar mark .
In this regard , the expert explains that Bitcoin will initially fail at the 25,000 US dollar hurdle, which means that it goes back to support at 21,000 US dollars. From here an upswing of up to US $ 30,000 would be conceivable.
The biggest beneficiary of such a scenario would again be the altcoins, because, as Capo believes, traders would switch to riskier cryptos in this case to compensate for Bitcoin’s dwindling chance of profit.
The current upswing of the DOGE could once again prove to be the starting signal for the Altcoins.